Australian Commission Amends Proposal on Internet Discussion Sites

Washington, DC, August 23, 2000 - The Australian Securities & Investments Commission issued on August 15 an "exposure draft" of an interim policy statement on Internet discussion sites that revises earlier guidelines.

The new Exposure Draft revises the Commission’s proposed guidelines for Internet discussion sites (IDS) to limit expressly the extraterritorial application of the policy. The Commission makes clear that its policy regarding IDS would only apply to an Australian IDS.

The original proposal, upon which the Institute provided comments, did not limit specifically the application of the guidelines to Australian facilities. The Commission’s discussion now specifically states that its policy is to ensure that its approach is consistent with the principles adopted by IOSCO for dealing with jurisdictional questions arising from cross-border offers of securities or investment services and that the IDS policy is consistent with its 1999 policy statement on the offer of securities on the Internet.

Besides clarifying the jurisdictional application of the IDS policy statement, the Commission has amended the policy to prohibit persons that are licensed to conduct investment advice business to operate an IDS within the IDS guidelines; licensees must operate IDS as a licensed activity. The revised guidelines also specify that an IDS may not operate under the guidelines, and must obtain a license if the IDS involves the giving of securities advice. The revised guidelines would impose certain obligations and disclosure requirements on IDS operators in addition to those originally proposed.

Although the original proposed policy statement contemplated implementation of the policy by August, the Commission seeks further comment on the Exposure Draft, especially for certain aspects of the policy framework. The Commission specifically seeks comment on whether the limitations on an unlicensed IDS might impede unnecessarily legitimate commercial activities by IDS operators and what, if any, additional disclosures and customer protections should be required of licensees that operate IDS.